YouTube may be celebrated as the only social media platform that rewards its creators with a piece of the advertising income pie, but at least one company thinks Web video is ready for a revenue revolution.
“It’s tough to make a living off just advertising,” explained Jason Kilar, the former Hulu CEO and founder of Vessel, the new video subscription service aimed at the YouTube set. “That’s why in television you see the world change when cable got started in 1979. That’s when television really got to be interesting in terms of production values and the economics for creators. We think the same thing is going to happen for Web video.”
Many digital video creators have long supplemented their ad-based income with brand deals and other income streams, but until now there hasn’t been a subscription-based service with their interests in mind. Vessel, which has been open to limited beta users since late January, goes live to anyone and everyone March 24. With the wider release comes a wider array of video content on the platform. Joining already established Vessel content creators like Rhett & Link and Connor Franta will be vlogger GloZell Green, gamer Mazzi Maz, Meredith Foster (Stilababe) from the beauty sphere, and science creator Veritasium, among many others. Collectively, Vessel’s content partners reach more than 200 million viewers across their platforms.
“There is a long history of people caring about certain content,” Kilar said. “The key here is the word certain. What we’re hearing from consumers that there are next-generation creators that I’d argue they care more about … than a new sitcom on CBS. If we can deliver a service that gets them earlier access to the content they love and do it in a way that’s curated and delightful, that’s real value. We feel very strongly about it. Something would be wrong if the world didn’t feel otherwise, otherwise the business would already exist.”
Subscriptions to the service cost $2.99 a month, substantially lower than subscriptions for other pay video services like Hulu or Netflix, but higher than the established price of zero on YouTube. As a special promotion, for the first 72 hours after Vessel’s launch, new subscribers will get a 12-month subscription free of charge, without even entering a credit card number.
While some content on the platform will not be exclusive to Vessel, instead debuting simultaneously on various platforms, much of it will have a window of exclusivity before it goes elsewhere. To woo multichannel networks (MCNs) and content creators to the service, Vessel began offering lucrative contracts in November 2014. From the creator side, Kilar says in addition to the 165 channels already on the service, thousands of other creators have expressed interest in using the platform.
“People that are applying to be on Vessel are simply trying to plug into this curated platform and this business opportunity,” he said. “If you typically make two to three dollars on the free, ad-supported Web, on Vessel you’re seeing north of $50. That’s the major appeal for pretty much everybody.”
Additionally, the platform has both a paid subscription level and a free, ad-supported service for viewers. On the ad-supported side, NBCUniversal will make late-night clips from The Tonight Show Starring Jimmy Fallon and Late Night With Seth Meyers available the day after they air on TV. FOX Sports, Universal Sports, and What’s Trending will also have content on the free service.
For now, Vessel reps aren’t releasing any stats on how content has been consumed during the beta, in part because the audience during that phase is unlike the one expected of the broader digital-video-consuming public. Now that the gates are open, it remains to be seen if audience will flock to a new platform for early access and a chance to support creators.
Of course, Vessel isn’t the only video service hoping to take on or supplement YouTube viewing, nor is it the only way for fans to financially support their favorite artists, but it is so far the easiest, most glossy, and most far-reaching option. For less than a cup of coffee, fans can access a slick site, see videos early, and feel like they’re helping fund more than one of their favorite creators.
Design-wise, Vessel is definitely a departure from YouTube or other video sites, with high-impact visuals dominating, including moments where video stills move akin to the images many might recognize from the Harry Potter films, which Kilar’s design team used as a direct inspiration.
“We had a lot of conversations about the Harry Potter newspaper,” he explained. “You know in the movie where the images moved? That’s something we talked about quite a bit. We thought if you could do that in a way that wasn’t obtrusive, if you didn’t have the volume on, that would be cool. … We really took a complete, fresh piece of paper approach to it. We wanted to design something that we ourselves would love and adore.”
From the advertising side, Kilar says 30 top-tier brands have already partnered with the site, and he attributes Vessel’s success both to the inroads he built over the past six years while with Hulu and a hunger for premium video content.
“This part of our business is actually the one that is the most straightforward,” he said. “Once we demoed the service, they got it. All these people are consumers; they are consuming video on their mobile device, and they get it. There’s also been a tremendous absence of premium inventory that’s available for a top-tier advertiser. It’s been something where we have more demand than we have inventory.”
As users begin to flow into the service over the next six months, Kilar says there are three areas he’s paying special attention to: the activity of fans on the service, the changing geography of the fan base with 40 different countries already represented during the beta, and an increase in creators signed up with the service.
“The whole ambition of Vessel is creating a service for the creators of the future on the devices that matter most,” Kilar explained. “I’m just excited to serve these creators and have them up and running.”
Illustration by Max Fleishman